An Agent s Introduction to Long Term Care Insurance

Transcription

1 An Agent s Introduction to Long Term Care Insurance The Long Term Care Solution Center October 2013

2 Table of Contents Introduction... 1 Daily Nursing Home & Health Aide Costs... 2 Section 1: Start Selling LTCi... 3 Section 2: Selecting the Right Policy for Your Client... 6 Section 3: Obtaining Illustrations; We Meet All Your LTC Needs... 9

3 Long Term Care insurance An Essential Ingredient for Your Clients Future The rising cost of health care and the decreased ability of the federal government to aid in our growing elderly population s health needs has made Long Term Care insurance (LTCi) an essential ingredient in your clients control of their future. In fact, the federal government offers Long Term Care insurance to all its employees and has even initiated the Own Your Future Long Term Care Awareness Campaign. Just two years of long term health care can easily wipe out the life savings of many Americans. It can also have a devastating impact on dependents who find themselves in the position of caretaker. As an insurance producer in today s world you have a responsibility to understand and teach your clients about Long Term Care insurance. As a leading provider of LTC insurance back-office support, we have made the sale and processing of Long Term Care insurance a lot simpler and much more profitable for our producers. We use our years of experience and know-how to help you throughout the process of selling and placing long term care cases. We make the process efficient, while offering you access to the broadest selection of LTCi products and carriers available. This manual is intended to educate and encourage you to introduce Long Term Care insurance to your clients so that they come to rely on you as a key player in their future estate planning. Our LTCi sales and back-office support includes: Agent contracting Marketing support Proposal generation Application processing Medical underwriting Policy service Commission reconciliation Interactive web site technology Management information In addition to these comprehensive services, you benefit the support of an experienced, industryleading LTCi team. Our goal is to help you make decisions about your clients coverage based on the most current information and resources available. From new policy developments to underwriting modification, We continually monitor the changes occurring in the dynamic LTC market. The increasing costs of long term care have been of great concern as our population continues to age. Long term care is thus more a financial issue than a health issue. The choices your client has, if care is required, will be determined by the amount of money he/she can pay for home care or facility costs. The chart on the next page is a good reference for recent facility costs nationwide. We are excited about the opportunity to service your LTC insurance sales needs. We are sure you will find this manual helpful and wish you the best in your business. are not approved for use in all states LTCI12--A, exp. date Not a deposit Not FDIC or NCUSIF insured Not guaranteed by the institution Not insured by any federal government agency May lose value. 1

4 Cost of Care To view the full 2013Genworth Financial Cost of Care Survey, click here. 2

5 Section 1: Start Selling LTC Insurance! Information You Need to Know LTC insurance is one of the hottest products today and we offer all the solutions you need to start selling. The following is important information you first need to know. Licensing Your licensing must be completed before you begin offering Long Term Care insurance. In some states, continuing education credits are necessary for licensing. With some companies you must be pre-appointed before you can submit an application and this can take up to eight weeks. For more information on licensing procedures, contact us at If you are already appointed through another agency, you must be released prior to submitting licensing paperwork. Please submit a copy of your release letter with your application. We cannot obtain the release for you. Required Client Materials The following materials must be presented to all potential clients. Copies of these materials are available to appointed agents free of charge. The Guide to Medicare must be presented to anyone age 65 or older. The N.A.I.C. Shoppers Guide must be presented to all applicants. An Outline of Coverage must be given to all applicants. Required Health Assessments Depending on the age and health of the prospective insured, the following information is generally required before a policy is issued: Personal Assessment Interviews or Face-to-Face Interview A licensed health practitioner (such as a nurse or social worker) will visit the prospective insured to discuss daily activities, past and present health conditions, and to determine cognitive abilities. We recommend that you advise clients to schedule this meeting. Attending Physician Statement (APS) Medical records are requested from the client s doctor to document the medical history. An APS is required of elderly applicants and those with medical conditions. Telephone Interview Carriers randomly call applicants to review the accuracy of their applications. You should inform your clients that they may be called. Asset Guidelines People should consider Long Term Care insurance if: They have assets in excess of $75,000 They have an annual retirement income of at least $30,000 for a couple and $25,000 for an individual They are able to make the premium payments without having to make lifestyle changes They can absorb possible premium increases without financial difficulty United States Health Council,

6 Frequently Asked Questions Q. How do I get appointed with McGill Brokerage and the various carriers? A. Complete the appropriate forms and submit them with a copy of your license to either us or to your home office. Q. Do I have to be pre-appointed to sell LTCi? A. Yes, some carriers require pre-appointment in certain states. Q. What is the response time when I request a LTC proposal? A. A proposal will be faxed or ed within 24 hours of your request, if received by 3 pm EST. Proposals will be mailed by request. If more than three quotes are requested, they will be mailed or ed, not faxed. Q. Help! I m having trouble understanding the proposals. A. Call us at We are here to help! Q. Do I need to submit a premium check with the application? A. YES! A premium is required for John Hancock and Transamerica. Q. What determines the quote I receive? A. We can recommend products and coverage based on your client s age and health conditions or you can request a specific carrier and benefits. It is possible that you may not receive the quote you requested due to your client s age or health condition. Q. When completing the application, why do I need to include date of onset or diagnosis of the client s medical condition? A. The underwriting departments need this information to help determine if the client has met the required adjustment/recovery period to qualify for insurability. Q. How long does it take to process an LTCi application? A. Normal processing time is 4-8 weeks from the time you mail the application to receipt of the policy depending on whether medical records are required or not. If medical records (APS) are required, it will increase the processing time. Q. Can I make changes to a policy after issuance? A. Changes can be made within 30 days of delivery (no more than 60 days after a policy is mailed). A change request form must be signed by the insured. Q. When is the delivery receipt due? A. Insurance companies are required by law to have proof of delivery 30 days after the policy has been mailed to you. Depending upon the carrier, there may be a delivery receipt that must be signed by both the client and the agent. Any exception must be approved in advance of delivery. Q. Do I need specific CE s to sell insurance? A. Most states require an 8-hour NAIC partnership training course with a 4-hour refresher course every 2 years. Check with your state for the requirements. The following states, CA, CT, IN, and NY, have specific training requirements. Please check their state insurance websites. 4

7 Q. What can I do to speed up the underwriting of my LTC applications? A. Please make sure that all medical information is complete with onset dates, medications, and doctor s full address. Have the client inform the doctor that an Attending Physician Statement may be requested and to have the records on hand. On all carriers applications, complete every section if anything is missing it will be returned to you. Send in carrier compliant quotes with all applications. Q. How do I receive information on the progress of my applications? A. A Pending Requirements report is ed, faxed or mailed to you from us when the application is received and then every 10 days during processing until the policy is delivered. You may also check case status online via our site. If you have questions, call us at If no one is immediately available to take your call, leave a message on voice mail and your call will be returned in the order in which it was received within 24 hours or less. Q. What else needs to be submitted with the application? A. Make sure to attach your business card and the proposal to the application. 5

8 Section 2: Selecting the Right Policy for Your Client Overview We recognize that every client is unique. The goal of this section is to present properly ordered criteria that helps you determine the best policy for your clients specific needs, and at an appropriate cost. The carriers we represent include: Genworth John Hancock Lincoln Life MoneyGuard Mutual of Omaha Transamerica Three Steps in Selecting a Policy Step One Understanding Medical Underwriting, Financial Ratings, and Spousal Discounts Step Two Selecting the Most Appropriate Combination of Benefits Step Three Calculating the Premiums Step One Understanding Medical Underwriting, Financial Ratings, and Spousal Discounts The following will help you determine which carrier will best fit your client based upon health, marital status (or other living arrangement) and age. Medical Underwriting The client s health will often determine which carrier to recommend. Depending on the medical condition of your client, certain carriers will underwrite applicants that other carriers normally decline. These carriers may offer sub-standard rates or will issue the policy on a rated basis, which increases the premium for clients afflicted with certain medical conditions. Several carriers offer preferred rates for applicants in good health and/or who meet certain requirements such as a non-smoking status or particular height/weight ratios. 6

9 Obtaining a Client s Medical Information To obtain the necessary information for medical underwriting needs, ask your client the following questions prior to the appointment: 1) Have you been hospitalized during the last ten years? If so, for what condition(s)? 2) What medications are you currently taking? For what condition(s)? 3) What is your height and weight? 4) What else do I need to know about your health? Then complete the Quote Request Form included in this booklet and fax to our office. Or, if you prefer, (and no major medical conditions exist) consult the carrier s Underwriting Guide and use the carrier s software to produce your own quote. Financial Ratings The financial security of the carrier issuing the long term care policy is perhaps one of the most important points to consider when selecting a policy. One of the key benefits of purchasing Long Term Care insurance is that the client gains peace of mind in knowing that the carrier will fulfill its obligation to his/her claim if necessary. We only represent companies that maintain at least an A rating from the following top rating services: A.M. Best, Standard & Poor s, and Moody s. Although financial ratings are important, we also take into consideration a carrier s market position in Long Term Care insurance and if the carrier has any innovative benefits or payment options. Spousal Discounts All carriers meeting our strict guidelines offer spousal discounts. Some carriers provide discounts when both spouses are approved for coverage, while other carriers will provide a discount regardless of whether the spouse applies. Certain carriers also offer discounts for friends or family members living together. Spousal discounts can vary based on the applicant s state of residence. Step Two Selecting the Most Appropriate Combination of Benefits Following are the guidelines that have been established for selecting the combination of benefits that will give your client the most appropriate, cost-effective coverage. We suggest that you incorporate the guidelines into future quote requests. If you have questions, call us and we will be happy to provide further explanations. Home Health Care Home Health Care provisions vary from policy to policy. Usually, the dollar amount available for Home Health Care is determined by selecting a percentage of the daily benefit amount for Nursing Home (NH) coverage (e.g. 50%, 75%, or 80% of NH benefit). If your client prefers to receive care at home (when feasible), we recommend selecting a Home Health Care benefit that is 100% of the daily nursing home benefit. If cost is a concern, choosing a Home Health Care benefit of 50% of the selected daily benefit will lower the cost of the premium. 7

10 Inflation Protection Health care costs are rising at an alarming rate so it is extremely important that inflation protection is built into the policy. The following are basic guidelines for the type of inflation protection generally used at different ages. Age Compound Available at 3, 4, 5%, or linked to the Consumer Price Index (CPI). The total pool of money will increase by the chosen amount on an annual compounded basis. Ages Simple, some form of inflation Available at 5%, the total pool of money will increase by the chosen amount on an annual simple basis, or compound (see above). Ages 76 and older - Consider Higher Daily Benefit Guaranteed Purchase Option (GPO) Also available is the GPO which offers the opportunity to increase the benefit amount by 5%, 10%, or 15% every few years. It gives the opportunity to change to 5% compound at age 65 without evidence of insurability. Elimination Periods The elimination period is the waiting period before benefits begin to be paid. Consider cost between a short elimination period and a longer elimination period, especially if the client is relatively young. Options include 30, 60, 90, 180 days, and in some cases 365 days. Benefit Periods The benefit period is the amount of time benefits are paid. For Integrated Policies (Policies that cover all forms of continuing care, from home health care to nursing home care and hospice, Pool of Funds) Average benefit period being sold is between 3 and 6 years. If there is a family history of Alzheimers, consider a longer benefit period. Daily Benefit We recommend the daily benefit be 100% of the prevailing daily long term care cost in your client s area. Please refer to the chart on page 2 for more information. Step Three Calculating the Premiums To determine the most cost-effective policy (the best value), it is necessary to provide an apples to apples comparison of benefits. Base your comparison on the following factors: The daily benefit selected The benefit period, i.e., 2 years, 5 years, Lifetime The amount for Home Health Care The selected elimination period The selected inflation protection option Eligible discounts, i.e., spousal, group The underwriting level, i.e., preferred vs. standard vs. sub-standard Non-forfeiture and other riders Note: The applicant s state of residence can also affect the cost of premium. 8

11 Section 3: Obtaining Illustrations We Meet All Your LTC Needs General Information Give us a call: Web Site: Visit us online jcmcgill.com 9

12 Instructions for Obtaining Quotes In order for us to respond promptly and accurately to your request for pricing information and policy recommendations, the LTCi Quote Request Form (included) must be completed and faxed to our Baltimore office. Our recommendations will depend upon the client's age, medical history, marital status, and if the spouse will be applying for the same policy. Illustrations may be requested online. How do I complete the Quote Request Form? 1) Fill in all the information requested on the form. 2) After recording your client s age and spouse information, ask him/her the following 3 questions: 1. Have you been hospitalized during the last ten years? If so, for what reason(s)? 2. Are you taking any medications? If so, for what condition(s)? 3. What else do I need to know about your health? This information is needed to complete the Medical History Form found later in this document. When will I receive my quotes? If you request three quotes or less, they will be processed within 24 hours. Quotes will be faxed or ed (if address is included on the Quote Request Form) unless you request they be mailed. We can recommend a type of policy depending on the underwriting information submitted on the Quote Request Form. If there are any health concerns, please complete the Medical History Form provided in Section Three of this guide. If you have any questions, call us at We re here to help you meet your clients needs. What policy(ies) will we be recommending? Recommendations are based on the individual circumstances of each client, including health, marital status (or other living arrangement) and age. Our goal is to assist you in offering your clients the most appropriate combination of benefits from a highly-rated carrier, and at the most economical cost. We offer you two main options concerning policy selection: Option 1: Ask us to recommend a carrier (our response will be based on underwriting and marital status). Option 2: Request specific carrier and product information. Please call us for assistance in obtaining quotes. We are here to serve you! 10

13 LTC: Carrier Features Company Ratings Type of Policy Type of Elimination Period Return of Premium Niche Market International Coverage Genworth PC Flex II A.M. Best: A- S & P: A- Moody's: A3 Comdex: 74 Daily Reimbursement Monthly Reimbursement Service Day Calendar Day Limited: Rider must be in force for 10 consecutive years, minus claims paid Name recognition and 4 underwriting classes Priv. Choice Flex NH 50% of the daily or monthly benefit for up to 4 years; HHC 25% of the daily or monthly benefit for 365 days John Hancock CCIII Mutual of Omaha MutualCare Solutions A.M. Best: A+ S & P: AA- Moody's: A1 Comdex: 93 A.M. Best: A+ S & P: A+ Moody's: A1 Comdex: 91 Daily Reimbursement Monthly Reimbursement Monthly Reimbursement Service Day Calendar Day Built-in prior to age 65 base policy Limited: Minus claims Limited: Minus claims if death before age 65 CPI Inflation Benefit Builder Built-in cash benefit of 30% coverage and uninsurable spouse rider Professional HHC rider 100% of the LTC benefit for a maximum of 1 year 12x the maximum monthly benefit cash if confined to NH or ALF Transamerica TransCare III A.M. Best: A+ S & P: AA- Moody's: A1 Comdex: 93 Daily Reimbursement Monthly Reimbursement Service Day Limited: Minus claims paid Built-in prior to age 67 base policy 4 underwriting classes; multi-life program to include enrollment team; 10x the max daily benefit as cash benefit Will pay the cash benefit if a USA licensed health care provider determines eligibility are not approved for use in all states Not a deposit Not FDIC or NCUSIF insured Not guaranteed by

14 Long Term Care Insurance Medical History Form Please print legibly. If husband and wife are both applying, please complete a form for each client. Should you need to provide more detail on any medical condition, please attach additional sheets. Agent Information Name: Phone: Fax: Client Information Name: Date of Birth: Age: Resident State: Martial Status: Height: Weight: q Male q Female Smoker: q Yes q No If client has quit, how long has it been: Medical Conditions Treated in Past 10 Years Medical Condition: Date of Onset: / / Medical Condition: Date of Onset: / / Medical Condition: Date of Onset: / / Medical Condition: Date of Onset: / / Medical Condition: Date of Onset: / / Medications Currently Taken Medication: Taken for: Dosage: Times/Day: Medication: Taken for: Dosage: Times/Day: Medication: Taken for: Dosage: Times/Day: Medication: Taken for: Dosage: Times/Day: Medication: Taken for: Dosage: Times/Day: Medication: Taken for: Dosage: Times/Day: Hospitalizations in the Past 10 Years Date of Hospitalization: / / to / / Reason for Hospitalization: Result: Date of Hospitalization: / / to / / Reason for Hospitalization: Result: Date of Hospitalization: / / to / / Reason for Hospitalization: Result: Special Notes: Fax completed form to Questions? Contact us at Thank you for your business! Updated 02.14

15 Long Term Care Insurance Quote Request Form Date: Please print legibly. Failure to do so may result in incorrect or delayed quote delivery. Agent Information Name: Phone Number: Agent License Number (mandatory for FL and CA producers): Company Name: Affiliation: Client Information Name: Gender: q Male q Female Date of Birth: Age: Smoker: q Yes q No Marital Status: Is the client s spouse applying? q Yes q No Discounts may apply even if spouse is not applying. If spouse is applying, please provide the following information: Spouse s Name: Gender: q Male q Female Date of Birth: Age: Smoker: q Yes q No Client s Resident State: State where application will be signed: If an application is signed in a state other than the client s resident state, a valid reason must be provided. Policy Options Target Premium/Desired Premium Range Which carriers are you appointed with through us? Policy Type: q Individual q Shared Benefit Type: q Monthly q Daily Nursing Home Daily Benefit: $ Nursing Home Benefit Duration: Years Home Health Care Coverage: q 50% q 75%/80% q 100% Elimination Period: Days q Waiver of Elimination Period for HHC Inflation Protection Option: q Simple q Compound % q GPO q None Riders: q Survivorship q Joint Waiver of Premium q Nonforfeiture Special Notes: Please note: We will only quote a standard rate unless a completed Medical History Form is provided along with this Quote Request Form. Questions? Contact us at Thank you for your business! For Insurance Professional Use Only not intended for use in solicitation of sales to the public. Products and programs offered through Tellus are not approved for use in all states. Policy riders are available at an additional cost and may not be available for all products. Terms and conditions apply LTCI C Copyright 2014 Tellus Brokerage Connections.